A Huge Value Question REGARDless of the RAINBOW

June 1, 2014
Daniel Goldstein, MD
Daniel Goldstein, MD

The cost of healthcare is spiraling out of control in the United States, and compared with other countries we don’t even have better health indices to show for it. We currently spend $2.8 trillion annually on healthcare, and this is predicted to increase greatly in the coming years.

CHICAGO-A big theme at ASCO 2014 is value in cancer care. On Friday, Ezekiel Emanuel gave a rallying call for action. On Saturday, Clifford Hudis discussed it in his presidential address.

The cost of healthcare is spiraling out of control in the United States, and compared with other countries we don’t even have better health indices to show for it. We currently spend $2.8 trillion annually on healthcare, and this is predicted to increase greatly in the coming years.

So here’s some food for thought: The case of ramucirumab, a monoclonal antibody against the vascular endothelial growth factor receptor 2 (VEGFR2). It inhibits VEGFR2 activation, ligand-induced proliferation, and the migration of human endothelial cells. It gained FDA approval in April 2014 based on the REGARD trial. That phase III randomized trial demonstrated a 1.4-month improvement in median overall survival with ramucirumab compared with placebo.

Updated results of the RAINBOW trial will be announced tomorrow. They will report a 2.7-month improvement in median overall survival in Western patients with metastatic gastric cancer treated with ramucirumab who failed first-line therapy.

Until ramucirumab, there were no FDA-approved agents for the treatment of gastric adenocarcinoma who had failed first-line therapy. So this is clearly an unmet need. It’s great that we have a new drug to treat our patients with, but how much does it cost? Here are some crude calculations. Bear in mind that these do not take into account negotiated costs or rebates.

It is dosed at 8 mg/kg IV every 2 weeks. With a mean US body weight of 82 kg, that is 656 mg per infusion. It comes in 500 mg ($5,100) and 100 mg ($1,020) vials, so that will be $7,140 per dose. That translates to roughly $15,500 per month.

In the REGARD trial, the median duration of treatment with ramucirumab was 8 weeks. So that will work out to $30,000 for an extra 6 to 12 weeks, depending on which trial you’re looking at.

Notably these calculations do not take into account the cost of administration, toxicities (although minimal), and supportive medications. Furthermore, if you account for the quality of life of a patient during second-line therapy for metastatic gastric cancer, the value of the drug will be reduced.

How did these prices get so high? There are many reasons suggested. For example, the need for industry to regain their investment for research and development, particularly in light of all of the drugs that never make it to the market. However, perhaps the most significant reason is the system of drug approval and price setting. Currently the FDA approves drugs based only on efficacy and safety. Once approved, congressional legislation prevents Medicare from negotiating the price of drugs.

The big question for society as a whole is the following: Are we prepared to pay this amount for this level of benefit? Warren Buffett said that price is what you pay, and value is what you get. Is ramucirumab a high-value therapy? What is our definition of value in cancer care?

A few years ago, Leonard Saltz and colleagues at Memorial Sloan-Kettering felt that ziv-aflibercept was not a high-value therapy, and refused to place the drug on their hospital formulary. They wrote an opinion piece in the New York Times, and the drug company quickly reduced the price. This is a rare example of physician action affecting the price of a drug.

The median US family household income is $50,000 per year. Are we, as a society, prepared to pay $30,000 to prolong a life by 6 to 12 weeks? This is the $30,000 question. I hope it doesn’t become the $64,000 question.